Next Ford CEO Jim Farley (left) and Ford Executive Chairman Bill Ford Jr. pose on the 2021 F-150 during the September 17, 2020 event at the company’s pickup-producing Michigan plant.
Michael Wayland | CNBC
Detroit-Ford Motor Chair Bilford has gradually increased stake and control of the automaker founded by his great-grandfather in 1903.
Unlike Elon Musk and other CEOs who recently monetized some of the company’s stock due to soaring prices, Ford has doubled his company of the same name in the last decade.
The 64-year-old is the company’s largest individual shareholder with 2.3 million shares of Ford’s common stock. More importantly, he is also the largest holder of Class B shares in the automaker, which has the super-voting rights that allowed the Ford family to maintain control of the company. Class B shares make up 2% of Ford’s outstanding shares, but dominate 40% of voting rights.
Billford directly owns 16.1 million Class B shares, or 23%, and is only available to families. According to FactSet, this is four times the 4 million he owned in 2012, or 5.7%.
From Microsoft’s Satya Nadella to Jeff Bezos and Musk, CEOs, founders and other business associates recorded $ 69 billion in shares in 2021 and are cashing in at a record-breaking pace. Profit.
Ford, whose investment has expanded through its work as chairman of the board, holds shares to realize Farley’s Ford + turnaround plan with “tremendous confidence” in the company’s management team led by CEO Jim Farley. Said that. Electric and connected vehicles. Billford received a total of $ 16 million in compensation from Ford in 2020. It is a combination of profit, cash and stock incentives.
Ford last month acquired 412,500 additional Class B shares held in a family trust. The move happened about a week after he exercised stock options to acquire nearly two million shares of common stock in the company, some of which were scheduled to expire.
Instead of monetizing the $ 18 million in revenue it would have earned by exercising the option as most executives do, it will have $ 20.5 million in cash and a tax on profits to hold shares. I paid.
“We feel we are in a very good position to provide excellent shareholder interests, and I wanted to make up the majority,” Ford told CNBC. “Since the scaling of the Model T, I think there are many opportunities to create maximum value for shareholders.”
Unlike his predecessor, Farley steered in October 2020 and won the trust of investors. Since then, automakers’ share has skyrocketed by about 270%, bringing market value to over $ 100 billion for the first time on Thursday. 2020 was the first year since 2001 when Ford’s stock exceeded $ 20 per share.
The stock closed at $ 25.02 per share on Thursday, with a market value of $ 9.99 billion. Ford is now worth more than its cross-town rival General Motors, which is worth about $ 90 billion.
Under Farley’s Ford + plan, the company is working hard on EVs such as the Mustang Mach E, the all-electric Ford F-150, and connectivity services to generate recurring revenue. The company expects an adjusted rate of return of 8% in 2023 before deducting interest and taxes. This is earlier than many analysts expected.
“Both order banks, Mach-E and Lightning, overwhelmed us,” Ford said. “We’re on this journey of electrification, but it’s not the only one. It’s all about connecting with our customers and developing around electrification.”
Ford directly owns approximately 20.3 million shares, including limited, common and class B shares. Holding that may exclude some trusts is worth more than $ 500 million as of Thursday’s closing price.
There are 71 million Class B shares worth about $ 1.8 billion owned by descendants of the company’s founder Henry Ford. Voting rights for the Ford family will decline when Class B shares fall below approximately $ 60.8 million.
Some have criticized the dual-sharing system for unfairly allowing families to maintain control of automakers. Ford has repeatedly defended the dual-share structure by allowing automakers to focus on the longer term rather than another “nameless, faceless company.”
“I think it’s really important that the family’s legacy lasts,” he said. “It gives us a face and perhaps humanity that many other companies don’t have.”
The dual-class equity structure that has been in place since the company was launched in 1956 has faced many shareholder challenges. At last year’s shareholders’ meeting, 36.3% of voters endorsed a system of giving equal votes to all stocks, slightly above the average of 35.3% since 2013.
Ford believes that ownership of his stock supports his defense of family stock and voting rights. Ford said he couldn’t remember selling Ford shares in the open market, if any. This does not include the exercise of options, the transfer of shares to a trust, or the conversion of common stock to Class B shares.
“I’ve been involved in this for a long time. This is my life and I love the company,” he said. “We really believe we are heading for an incredible future.”
– CNBC Robert Frank Contributed to this report.
Billford has doubled Ford’s stake and is accumulating more control over the company
Source link Billford has doubled Ford’s stake and is accumulating more control over the company